Programmatic: the keys to unlocking the next frontier

fourthsource.com

Programmatic can no longer claim to be the bright young thing in the digital advertising world. In fact, it’s the new normal: the bulk of digital display advertising that is bought and sold in the world’s key markets, including the US and Great Britain, is done so programmatically. But this ubiquity is unchartered territory, and the industry is now asking itself: what does it mean to be the default option for the advertising industry?

Programmatic still has huge growth potential, provided it can continue to evolve and enhance what it offers the industry. Specifically, there are five areas that need to be addressed in 2016.

1. Counter perceptions of ads being intrusive and irrelevant

The rise of ad blocking has been a big shock to the programmatic ecosystem. As consumers become progressively less willing to accept disruptive or irrelevant ads, programmatic campaigns need to be implemented in a more sophisticated (and better targeted) way. The industry must also be mindful that with the rise of mobile advertising, consumers begrudge ads all the more that appear unsolicited on their smartphones using up costly data packages.

Better use of frequency capping across devices, serving ads at times of day when consumers are more receptive to making a purchase, and making more effective use of dual screening are just some of the ways ads can be less intrusive. In addition, companies across the media value chain need to invest more in understanding their audience, beyond cookies and basic supporting metrics.

2. Investing in content

Native advertising will also play a significant role in the future of programmatic, with the value of native formats expected to double to almost $60 billion in three years.

Although it sounds simple in principle, getting native right is an art. You need to understand in detail who the target consumer is and what makes them tick; this goes way beyond which sites they have visited and their age or gender. A publisher can help, but ultimately advertisers will need to draw on third party data that reveals the attitudes, motivations, product/brand use and leisure activities of people attached to a specific media brand.  Above all, consumers hate to feel duped, so there is a balancing act to be carefully struck between making content not feel like an ad, whilst at the same time being honest with the consumer that this is paid-for activity.

3. Growth through automated guaranteed

The media industry may have embraced programmatic as its default buying option, but there is still a desire for more simplicity, accountability and a fairer distribution of ad spend. As a result, automated guaranteed, in which deals are negotiated directly between buyer and seller, and pricing and inventory are guaranteed, will drive future growth in programmatic.For automated guaranteed to work, the media buyer must identify exactly where they want their ad to be placed, using a trusted third party data source. Some agencies are choosing to invest more in ad tech, moving tech in-house to gain more control of the workings and value of online campaigns. We’re likely to see others follow suit over the next 12 months.

4. Real action on fraud and viewability

One of the biggest challenges to the industry is ad viewability, and this year we’ll see refined standards and certification to combat poor visibility and fraudulent bot traffic. This isn’t an issue that can be solved overnight but pressure from advertisers is finally starting to yield results.Targeting not in a solely audience-led way, but identifying which mix of branded online inventory represents the best match for the audience being targeted, can at a stroke resolve much of the fraud/viewability conundrum. This means not only evaluating how well specific inventory reaches a target in terms of overall numbers, but also how well the inventory fits with the advertiser’s brand values and positioning and thus its likelihood to engage, not just reach.

As viewability issues are overcome, the remaining genuine traffic will inevitably demand higher prices. Publishers and creators of quality content stand to see greater revenue but advertisers, although they will see less wastage, must also pay more for the limited supply.

5. Better cross-device targeting and tracking

Fragmentation in accessing digital media on different devices makes it very difficult for cookie-based programmatic advertising to achieve a unified view of the consumer. Trading desks and other ad tech platforms have attempted to address this in two ways: deterministically, through registration data when users are ‘logged in’; and probabilistically, through assumed activity based on factors such as geo-location of devices.

Over the next year, the advertising industry will need to invest significant time and energy in finding solutions that give media buyers and sellers confidence that they are meeting their campaign aims, even if cookies cannot achieve this. Consumer habits in relation to digital advertising consumption are changing with ever increasing rapidity and the industry needs to be more agile and proactive than ever in order to take advantage of the opportunities this consumption affords.